What are Non-Tariff Barriers and how might it impact trade negotiations? Table of Contents Introduction: Trade Uncertainty and Tariffs What Are Non-Tariff Barriers (NTBs)?...
What are Non-Tariff Barriers and how might it impact trade negotiations?
Table of Contents
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Introduction: Trade Uncertainty and Tariffs
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What Are Non-Tariff Barriers (NTBs)?
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Common Types of NTBs • Government Subsidies • Country Regulations & Standards • Import Quotas • Special Import Licenses • Customs Delays • Local Content Requirements
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Why NTBs Complicate Trade Negotiations
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Impact on U.S. Trade Strategy
- Conclusion: Beyond Reciprocal Tariffs
7. Summary
What are Non-Tariff Barriers
While uncertainty breeds volatility, which is good for trading, it can also make it difficult to interpret news headlines.
I originally assumed that the goal of reciprocal tariffs was a simple one, match levies to bring them down and thereby stimulate US exports.
However, as I explain in What is the Trump reciprocal tariffs game plan? figuring out the tariff game plan and then satisfying President Trump is not an easy task.
In this regard, the term Non-Tariff Barriers (NTBs) has been cited both by President Trump and other administration officials as obstacles to negotiating trade deals.
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What are Non-Tariff Barriers
What are NTBs?
NTBs are restrictions employed by countries to control the flow of trade across their borders without having to resort to tariffs or taxes on imports.
NTBs use other methods (e.g. regulations) rather than tariffs to make it more difficult and/or expensive to export good into the country.
What are Non-Tariff Barriers
List of Non-Tariff barriers
- Government subsidies providing financial support to domestic manufacturers to make their products cheaper and more competitive to export.
- Country regulations and standards, such as food safety, product labeling, environmental compliance must be met. This can include certain goods being totally banned for health or safety reasons. I remember traveling to New Zealand where upon arrival I had to have my hiking boots inspected. They were inspected to make sure there was no dirt in the soles that might contaminate the soil.
- Quotas place limits on the amount of a specific good that can be imported. Li
- Special licenses required to import specific goods.
- Customs delays as procedures and documentation are used to slow the import process.
- Local content rules that require a percentage of a product to be made locally.
As you can see, trying to quantify NTBs is not a simple, if not impossible task. However, adding them into the negotiating mix makes it a more complicated process.
This suggests the current Trump tariff negotiations will not be one size fits all and will go beyond just trying to level the field through reciprocal tariffs.
Summary:
This article explains the concept of Non-Tariff Barriers (NTBs) and their growing role in international trade negotiations. Unlike traditional tariffs, NTBs include regulations, quotas, subsidies, and licensing requirements that restrict imports without direct taxes. The piece explores how NTBs complicate efforts to achieve fair trade, particularly within the context of the Trump administration’s trade strategy. It highlights that resolving trade disputes isn’t just about matching tariffs, but also addressing the less visible, yet impactful, non-tariff measures that can hinder U.S. exports and global market access.
Published by:
Daniel Carter